Because There’s More to a Shop than Machining

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Certainly, one of the goals in launching our Top Shops benchmarking survey a few years back was to learn about the types of machining equipment and shopfloor strategies leading shops are leveraging. However, we wanted the Top Shops survey to encompass more than that. We also wanted to identify key business-related traits common to successful shops and find out what human-resource practices they employ. Along those lines, here are three perhaps not-so-obvious survey topics I think are telling:

• Quote-to-book ratio. Last year’s survey showed that Top Shops, i.e. the group of best-performing shops determined by totaling the points assigned to select survey questions, are more effective at quoting jobs. The median quote-to-book ratio for Top Shops and other surveyed shops were 70 percent and 51 percent, respectively. This suggests that Top Shops are able to generate more accurate quotes because they have a better handle on their overall processes and seem to be more disciplined about the type of work they go after.

• Bonus plans. Each year, we ask shops to list hourly wages for machine operators, set-up personnel and CAM programmers. Past surveys have shown no big difference between the hourly wages that Top Shops offer compared to other shops. However, leading shops are more likely to offer bonus plans. This is a win-win in that the employees are motivated by the potential for additional compensation and shops can realize improved productivity. Likewise, more Top Shops provide annual review/raise programs and team-building exercises. Review/raise programs enable managers and employees to come together to discuss an employee’s strengths while mapping out a path for growth within the organization. Team-building exercises help improve the way all employees interact within the company and make it easier to overcome obstacles because people are more open to working together to solve problems.

• Sales/marketing tools. Surveys show an interesting trend in terms of how shops use the Internet and social media as sales and marketing tools. In 2011, only 5.4 percent of Top Shops created videos and uploaded them to YouTube. This grew to more than 16 percent in 2013. Similarly, nearly 23 percent of last year’s Top Shops use social media—Facebook, Twitter, LinkedIn, etc.—compared to only 11 percent in 2011. It’s hard to judge how effective these marketing tools are, but it’s evident that an increasing number of successful shops are testing the waters in an effort to get their company’s message in front of additional customers.

This year’s Top Shops survey is now live and runs through mid-February. I encourage you to read this story describing the survey, and then go online and participate. After all, benchmarking should be part of every shop’s continuous improvement efforts.

Editor Pick

The presidents of three Top Shop manufacturing companies explain why benchmarking their businesses is important. It is a valuable tool that "shows how well or how bad you are doing." It pinpoints what to work on in order to emulate other top shops. It helps identify metrics for evaluating operations compared to your peers.